Court Bars OFAC From Reinstating Tornado Cash Sanctions
A federal court has permanently barred the U.S. Treasury from reimposing sanctions on the crypto mixer Tornado Cash, marking a significant win for crypto privacy advocates. Judge Robert Pitman ruled that the Treasury's previous actions were "unlawful" and mandated a permanent injunction against enforcing sanctions. The ruling followed the Treasury's voluntary lifting of sanctions in March and rejected its attempts to avoid a final judgment. The Office of Foreign Assets Control (OFAC) is now legally prohibited from reinstating the original sanctions. The case originated from OFAC's August 2022 sanctions against Tornado Cash, which was accused of facilitating over $7 billion in money laundering. The Fifth Circuit Court of Appeals previously ruled that OFAC exceeded its authority, establishing that immutable smart contracts are not property and setting a precedent for the treatment of blockchain protocols under U.S. law. The decision aligns with the DOJ's recent announcement to halt criminal charges against crypto mixing services unless linked to criminal activities.
